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Pay Freeze; U.S. Secrets Leaked

Aired November 29, 2010 - 19:00   ET


JOHN KING, HOST: Thanks Wolf and good evening everyone. In Portland, Oregon tonight prosecutors describe a chilling plot to kill hundreds gathered for a traditional Christmas tree lighting. Did religion play a factor in the targeting? And did the feds go too far in assisting the suspect with his plot? We'll talk to Portland's mayor.

Here in Washington, a national security concern of a different sort, a quarter million sensitive State Department cables are leaked into the public domain. In them world leaders share what they thought would remain secrets and U.S. diplomats share often unflattering opinions of those same leaders.

Secretary of State Clinton is leading the effort of damage control and as mad as she is, she's smart enough to mix in a little humor.


HILLARY CLINTON, SECRETARY OF STATE: I can tell you that in -- in my conversations, at least one of my counterparts said to me, well, don't worry about it, you should see what we say about you.


KING: We'll dig deep on the diplomatic fallout and on another big question, why can't the world's biggest super power better protect its secrets?

But let's begin tonight with your money and new evidence of how your midterm election message is being received here in Washington. President Obama says his read is that voters want bipartisan cooperation and some serious steps to curb deficit spending, so today the president called for a two-year freeze on federal pay.


BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: The hard truth is that getting this deficit under control is going to require some broad sacrifice. And that sacrifice must be shared by the employees of the federal government.


KING: Tonight, many liberals say the president is foolishly caving to the Republicans. Those Republicans are applauding the president's decision, but also saying it's just a first step. So let's debate the pay freeze. The big bipartisan Tuesday night summit at the White House, and more with Erick Erickson, CNN contributor and editor of the conservative, Democratic strategist and CNN contributor Paul Begala, senior political analyst Gloria Borger, and our senior congressional correspondent Dana Bash.

So Paul, I want to start with you because the president here, look, he knew. He knew the Republicans -- the House will be in Republican hands in January. A pay freeze was going to be in their budget, so he decided to beat the locomotive, not the caboose and to get out ahead of the politics of this, which is smart politics for the president.

Get out, get some credit on this, and show the voters I hear you, we're going to do something. But he just can't win. Here's -- this is -- Larry Mishel runs the Economic Policy Institute, a labor-backed economic think tank in Washington. "This is another example of the administration's tendency to bargain with itself rather than Republicans and in the process reinforces conservative myths, in this case the myth that federal workers are overpaid."

Now I'm going to keep going on this point here -- on the "Daily Kos" today Jed Lewison (ph) writes this. "So instead of actually doing something real about sky-high deficit spending, like pulling out of Afghanistan and Iraq ahead of schedule, we get a symbolic gesture that will reduce federal spending by less than 0.05 percent. And with that symbolic gesture we witness President Obama's unfortunate alter ego, President Gimmick." This is from the left.


PAUL BEGALA, DEMOCRATIC STRATEGIST: Yes, but I do think this point about capitulating rather than negotiating is a valid one with this president. The pay freeze, probably a good idea, but should have come out of negotiation. Where's the Republicans' give when the president gives --


GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You know people don't like government, and this is an easy --

BEGALA: What are the Republicans proposing --


BORGER: -- a gimme (ph) for the president.

BEGALA: Then you get it on the Republicans' turf, right? Why don't you say look I'll freeze federal pay and cut this and that program, you guys need to come with taxes on the rich, at least say people who make over $1 million a year don't get a tax cut --

(CROSSTALK) BEGALA: My lord 250,000 a year. He does this all the time. He capitulates it then negotiates, he bargains with himself. And I think that's a very valid point.


DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: This is what he's doing. Why didn't he do it before the election?

BEGALA: Well, sure.

BORGER: Because there was an election.


BEGALA: He came into office and froze White House pay right away --



BEGALA: -- which was good and I haven't seen the Republicans --


BASH: If you're a federal worker, I get that, but in the broad scheme of things, it's largely symbolic as are earmarks. They don't really make that much of a dent. So why not do it before to make the point?

KING: And so Erick, to that point, if you're the Republicans and the president has had this gesture tonight and the man who will be the House speaker, John Boehner, said good for you, Mr. President. This is something we have done anyway. Do the Republicans now reciprocate or do they just demand more?

ERICK ERICKSON, CNN CONTRIBUTOR: I think they'll probably demand more given that he folded so easy on this one. Why not? The problem is that they're both fighting on the wrong ground. I mean if you look at the data the federal workforce is only 200,000 people larger than it was in 1960. With inflation and population growth that's ridiculously small. The growth of the federal government has happened at the state and local level --


ERICKSON: -- where you have massive increases that are bankrupting states and local governments to comply with the federal government.

KING: All right let me go -- let me show -- to make Erick's point and to make I think the point Paul was making earlier and everybody's making about what does this mean? Here's essentially what we're talking about when you bring this up. This is what the president says you'll save. You freeze federal pay now you save about $2 billion this year, $28 billion over five years, $60 billion over 10 years. Now that's not chump change. That's real money that we will save here.

So that's what the president is saying (INAUDIBLE). But the question is what do you get in the big picture? This is your federal budget right here. Federal salaries are about six percent of the federal budget. You want to get real savings you've got to get into the Defense Department, Social Security, Medicare and Medicaid, the other federal spending. As a matter of fact, assume this all goes through, the president has to get approval for this.

But assume that pay freeze goes through for two years, this is what you get. You save less than one percent of the federal budget. That's over the 10-year period. So if you're going to do serious deficit reduction, you've got to talk about Social Security. You've got to talk about the Pentagon. You've got to talk about Medicare and Medicaid, and let me go back to Erick on this one. First, there are many who would say, Erick, you also have to talk about tax increases. That if you're going to make all those cuts in those programs that are very politically popular, you still probably need to bring in a little bit of revenue too. Is that on the table?

ERICKSON: I hope not. You know, the issue is Republicans are always told we need to raise taxes. Let's cut some significant spending first and then let's talk about it. But we always see this raise taxes first. I don't think we have a revenue problem. We have an expenditure problem. Ultimately, though, I really don't think either side is going to get serious about deficit reduction.

BORGER: Can I just defend what the president did today for a moment, which is that sometimes I believe presidents have to make symbolic gestures. OK? And this was, we all agree, symbolic. Look at your pie chart -- completely symbolic. But you're about to get a report from the Deficit Commission. You're about to sit down tomorrow with congressional leaders.

People care about deficit reduction. They don't like the federal government very much. They think federal employees are treated differently on their health care and on their pay increases. And so, he made a symbolic gesture. What's wrong with that?

BEGALA: Hold him to his own standard. He was the guy who pooh- poohed Bill Clinton for doing school uniforms, which is not just symbolic. It has a real effect on discipline in the classroom, so let's hold him to his standard. What caused the deficit? Not federal pay.


BEGALA: Tax cuts for the rich --


BEGALA: Two wars which we didn't pay for and a prescription drug entitlement for seniors we didn't pay for and then the recession. Those are the things that caused the deficit. I think those are the things that we need to look at --

KING: And some increase in spending in the last couple of years, the Democrats. You're absolutely right -- you're absolutely right on the big foundation and then the rate of spending increases since you've had a Democratic president and a Democratic Congress has gone up some -- some --

BEGALA: Mostly through the recession.


KING: Stimulus spending -- sure you can argue --


BASH: You see the point that we are talking about federal employees. Symbolically, politically, there is no question about it that if you're trying to send a signal that you get it, that the federal government --


UNIDENTIFIED MALE: Don't tell me you don't see the symbolism.


UNIDENTIFIED FEMALE: I agree with that too.


KING: Here's the bigger point. We've all been waiting since the election to see what message everybody gets from it. And this is the president's first big post-election gesture. Here's what I'm going to do and as he did this today said -- and he -- the president himself said this is only a down payment. He was not saying this is a huge deal. He was actually very candid and saying what piece of the pie this would be.


KING: He went on to make this point about the tone he thinks needs to come next.


OBAMA: Everybody's going to have to cooperate. We can't afford to fall back on to the same old ideologies or the same stale sound bites. We're going to have to budge on some deeply-held positions and compromise for the good of the country. We're going to have to set aside the politics of the moment to make progress for the long-term.


KING: I mean the cynic in me wants to say good luck with that setting aside the politics for the moment. But they have this big meeting tomorrow. And here is the stunning reality if you're watching at home and you think well the president is going to sit down with the Republicans and Mitch McConnell, the Senate leader will be there, John Boehner, he'll be the speaker and the Democratic leaders from Congress will be there too.

Sure, the chairs or the titles may have changed. But they've all been here for two years, right? They have these great relationships, right? They have no relationships. The president of the United States and I'm not blaming -- I'm blaming both sides. I'm not going to blame one or the other. I'm blaming both sides. There are no relationships. These guys are going to sit down to do what?

BASH: They're going to sit down and they're going to talk. And what was interesting all throughout the day, John, the expectations have been set so incredibly low, you know sometimes it's politics 101, but I think in this case it's legitimate. From both the Democrats, the White House Democrats on Capitol Hill and especially the Republicans saying now this is just going to be an hour long tomorrow morning.

They're going to serve open -- have their opening salvos. I don't get the sense unless they're really hiding something deep in their pocket that anybody's going to come out with either an olive branch or even try to call the other's bluff. They're kind of dug in on -- and their topics specifically on the tax cut issue with the Democrats, issues that they can't --

KING: But why is it -- why is it so bad? Why can't you go back? And I guess we're going back too far, but to the days of Reagan where he and Tip O'Neill sparred like hell, but they weren't afraid to have a drink. George H.W. Bush fought with the Democrats, they weren't afraid to sit down and talk things through. Why is that gone?

BEGALA: By the way, Newt Gingrich was impeaching Bill Clinton and yet President Clinton worked with Newt to get a lot done for the country.



BEGALA: And so it has been done before, there is precedent. But here's my advice, Mr. President, it starts with ideas. Not with talking about being bipartisan. Everybody has to give up something -- blah, blah. That's just process. Start with ideas. Here's my idea, payroll tax holiday. That's mostly a Republican idea. OK, it doesn't come from my side of the political aisle. That's OK. The president makes the mistake if he defines the election message as cut spending. That's the Republican message. His should be create jobs.


BEGALA: Go to the Republicans and say --


BEGALA: -- Mr. Boehner, what ideas do you have to create jobs and I'll meet you on a payroll tax --

KING: But beyond any of the specifics, Erick though isn't it critical that these guys develop some relationship of trust? They don't have to agree, but can they at least learn to trust each other?

ERICKSON: They're going to have to. And you know for the past two years, I think it was a tactical mistake in the White House. They didn't need the Republicans either in the House or the Senate, so those relationships weren't built. The Republicans knew they weren't needed so they never made those roads. They're going to have to.

But you know the cynic in me listening to the president saying we're going to have to get past the old ideology and the same old talking points, I guarantee day after tomorrow Republicans will still be talking about extending the full Bush tax cuts. Democrats will still be talking about Republicans only wanting to give tax cuts for the rich. We're not going to move past that point. They have dug in their heels and they're going to have to fight it out.

KING: And Washington will be Washington, I guess. Maybe we'll see if tomorrow brings us some great revelation. We'll bring everybody back to talk about it. Erick, Paul, Gloria, Dana thanks.

When we come back, David Gergen and Fareed Zakaria on the big other news in Washington today, 250,000 State Department cables supposed to be classified leaked into the public domain. What's the damage? Stay with us.


KING: The Obama administration is coping with an embarrassing and major diplomatic scandal, the leak of confidential communications between the State Department and 274 U.S. embassies and countries around the world. The Web site Wikileaks claims it has more than 251,000 documents. They contain frank discussions of world hot spots as well as some unvarnished comments on world leaders, not all of them favorable. Secretary of State Hillary Clinton has been working the phones trying to assess the damage.


H. CLINTON: I think that this is well understood in the diplomatic community as part of the give and take. And I would hope that we will be able to move beyond this and back to the business of working together on behalf of our common goals.


KING: Will she be able to achieve that, though? What is the fallout? And why can't the world's leading superpower do a better job protecting its secrets? CNN senior political analyst David Gergen served as an adviser to four U.S. presidents. He joins us from Boston today and in New York Fareed Zakaria of CNN's "FAREED ZAKARIA GPS". Is this just highly embarrassing or is it significantly damaging?

FAREED ZAKARIA, CNN'S FAREED ZAKARIA GPS: I think it is a historian's gold mine. These are documents that are very rich, very detailed. Bill Burns, a very senior U.S. diplomat describes a Russian wedding in extraordinary, almost novelistic detail. This is stuff historians will salivate over. But I do think at the end of the day, there is little here that is genuinely of a scandalous nature.

If you compare it to the leaks that came out in the '60s and '70s, the United States had organized a coup against the South Vietnamese leader. That it was trying -- it had made several attempts to assassinate Fidel Castro, the Church Commission's findings on the CIA's role in assassinations everywhere. Most of this stuff by contrast is definitely sort of new. We didn't have official confirmation of it.

But we knew that the United States government thinks that Syria is arming Hezbollah, or that the Saudi Arabian -- Saudi Arabian private citizens are funding al Qaeda. Much of what's in here, we know. The depth, the richness, the texture is all tantalizing to historians and deeply embarrassing to the United States government.

KING: You share that take, David? It's interesting to read -- to follow up on Fareed, says that you know one of these cables calls the president of Russia Robin to Putin's Batman. And it has -- you know it calls into question some of Prime Minister Berlusconi's more colorful moments in Italy. But is there something in there that could undermine the United States or one of its allies at a key moment, whether it's a challenge in Pakistan, a challenge in Afghanistan?

DAVID GERGEN, SENIOR POLITICAL ANALYST: Yes. I think Hillary Clinton was exactly right. If anything, I'd like to see the people who did this strung up. Listen, it may be a historian's treasure- trove as Fareed says, but it is a diplomat's nightmare. The -- it's really important for a great nation to be able to have frank conversations among its diplomats about what's happening overseas and to be able to report back to Washington what people are learning from others who in -- in a confidential way -- and then to be able to report that back.

And to have all this sort of ripped open as if "The New York Times" had all of its anonymous sources disclosed at one time, all of those anonymous sources would freeze, they would dry up. And that same thing -- that same danger exists in diplomacy. So I do think this is damaging to the United States. And I think it's damaging to American power.

KING: Here's one of the cables, the dispatches that I read and then you think could this undermine an operation next week or next month? It's very important. And this is a cable back from the ambassador to Yemen after General Petraeus sits down with the president of Yemen. And essentially the president of Yemen says "we'll continue saying the bombs are ours, not yours."

And the foreign minister goes on to say -- the prime minister goes on to say he lied to the parliament. Saying that it was -- Yemen was using American-purchased weapons but not American military operations. That is going to cause some fallout in Yemen, Fareed. Might that government now be more reluctant to allow covert U.S. operations?

ZAKARIA: John, you actually picked the one -- the one cable that I also noticed was going to be very embarrassing to the United States and could place some of our operations in jeopardy. There are a couple like that in Pakistan about nuclear fuel and there are a couple in the Arab world particularly with the Saudis with regard to Iran. So look, I mean actually think David and I are broadly speaking on the same page. This complicates the day-to-day mechanism of diplomacy. It does make it more difficult for countries to feel like they're speaking in confidence to us.

KING: There have been some who say Peter King, for example, the congressman from New York put them on the terror -- put WikiLeaks on the terror list essentially. Others have said find some way to shut them down. Obviously it's an international organization and as frustrating as this is to the administration, David to you first, do they have any options here? This is a question of why can't they -- why can't the United States protect its own secrets. It really doesn't have much power to do much here, does it?

GERGEN: It does not have much power to go after the WikiLeaks people. It does have power to go after those who leaked to WikiLeaks and those are insider, on government (INAUDIBLE). But I do think it's astonishing for all of us to think that one private first class sitting in an post, outpost 40 miles from Baghdad, you know is one kid who had secret clearance could download all this stuff and give it to WikiLeaks and he's now in jail, of course. But -- and he may go away for life, I hope he does. And so there is this question, why in the world is the U.S. government in a situation where one person could crack it like this and get all these documents and unload them? I do think that's something the government has to address very quickly.

KING: What is the teachable moment, Fareed?

ZAKARIA: Well, it's a complicated one to be honest. Because for the last 10 or 15 years, we've heard people saying you know the big problem with the United States government is it's a dinosaur in the information age, its computers don't talk to one another, it does not share information. So lo and behold what we discovered is that the U.S. government actually addressed many of those criticisms.

One of the reasons this happened is that the State Department's computers now can talk to the Defense Department's computers or at least they were able to until today. This morning the State Department decided that's enough of that. We're going back to old- fashioned silos and the Defense Department can now no longer access State Department computers. So the point here was, by the way, that U.S. soldiers should have access to as much information and intelligences they need in forward-operating basis.

We'll have to -- you know we'll have to figure out how to work better in an information rich environment. Remember none of this stuff was really the super classified stuff. Top secret clearances are held by about 900,000 people in the U.S. government. So there's nothing here that the president or the national security adviser or the secretary of state wrote or even probably received. But we have to figure out better rules of the road, better ways to share this information without creating this potential for embarrassment. I guess I just have a certain amount of sympathy for the U.S. government. It has been trying to get with the program and the information age, and this is, of course, the dark side of the information age.

KING: Fareed Zakaria, David Gergen, as always gentlemen, thanks for your time.

GERGEN: Thank you.

ZAKARIA: Pleasure.

KING: More on the WikiLeaks controversy ahead. Also, much more to come in the program, including an exclusive conversation with the mayor of Portland, Oregon -- his city, federal authorities just disrupted a terror plot. He'll tell us the details and whether he thinks other cities could be targeted, as well.

Also tonight, a partisan logjam finally broke in the United States Senate about fixing your food safety. We'll tell you what's in that bill and how it should make your food safer.

And "Pete on the Street" tonight, he wants to talk about the WikiLeaks controversy. Also we have some interesting tweets of the day. We'll let Pete pick.


KING: Want to update you on some breaking news in northeastern Wisconsin where police are on the scene of a hostage situation at Marinette County High School (ph). That's about 150 miles north of Milwaukee. A student reportedly is holding a classroom hostage. Reports so far though say there are no injuries so far. We'll keep on top of that story. For now though let's check in with Joe Johns in Atlanta for other news you need to know right now -- Joe.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Hey, John. Current and former U.S. officials tell CNN the U.S. has come close to taking out al Qaeda's second in command on more occasions than previously acknowledged. On one occasion in 2004, the Pakistanis bombed an area where Ayman Al Zawahiri was thought to be hiding, but they didn't get him.

South Korean military officials say they are delaying an artillery drill planned for tomorrow on the island the North Koreans shelled just last week -- all eyes all over the weekend and into today watching so closely the Koreas -- John.

KING: Watching the Koreas, watching the military exercises, and Joe watching to see whether China will heed the U.S. request to step up with a little more aggressive diplomacy. We'll see Joe a bit later in the program.

When we come back, a suspect indicted today in an alleged Oregon bomb plot. We'll talk exclusively with Portland's mayor about when he was informed of the investigation, what he thinks of the fed's tactics and what he will say tonight to the city's Muslim community.


KING: Today a federal grand jury indicted a Somali-born teenager on charges he attempted to use a weapon of mass destruction. Mohamed Osman Mohamud was arrested Friday after allegedly trying to bomb Portland, Oregon's tree lighting ceremony. It was all part of an FBI sting operation and no actual bomb was involved. So why Portland and is this evidence of some new al Qaeda strategy?

Here to talk it over is Portland, Oregon Mayor Sam Adams. Mr. Mayor, let me start right there. In your conversations with the federal authorities and your own police department, do you think this was a crowd-inspired event? Meaning this individual was trying to blow up any event with a large crowd or was it a religious targeting because it was a Christmas tree-lighting?

MAYOR SAM ADAMS, PORTLAND, OREGON: Well, from the indication that I have from the briefings that I've been involved with, it was -- it was an event of opportunity. There was no evidence, at least that I've been told that it had anything to do with religion. It was relatively close to Corvallis, which is about an hour and ten minutes south of here. It was an event of opportunity.

JOHN KING, CNN HOST: How long have you known about this investigation?

ADAMS: I learned of it, actually, after the arrest was made. So about 9:00, 9:15 on Friday.

KING: Does that worry you at all? They've obviously been looking at this individual going back a period of several months. Should the mayor have been brought in to it at one point? Did your police officials know about it at one point and not tell you? Or was it just the feds?

ADAMS: Well, it was a top-secret counterterrorism investigation. The police are brought in the fall around September. It is not uncommon in my experience for these sort of federally-directed top- secret terrorism investigations to be kept from elected officials. But I have been told, and it's what I would expect that if this had been anything other than a decoy bomb and a terrorist or would be terrorist was -- had any -- any inkling of getting their hands on any sort of dangerous materials that I would have been informed much earlier.

KING: I want your sense of what you think the scope of this is. And in doing so, I want to just first have you listen to what the U.S. attorney for Oregon how he described this case.

DWIGHT HOLTON, U.S. ATTORNEY FOR OREGON: It is fair to say that the threat, he was very serious. The defendant as is set forth in the complaint demonstrated a very serious determination to commit violent jihad beginning on August 11 last year when he reached out for persons in the northwest territories of Pakistan. KING: Is it your understanding now that you've been briefed more thoroughly on this, was this a lone wolf? This gentleman operating just by himself? Or was it, based on your understanding part of maybe a larger plot to target Portland, but maybe other operations in other cities, as well?

ADAMS: Based on the briefings that I've received from the Oregon U.S. attorney and the FBI, it looks like this individual, although making outreach to foreign contacts was acting alone here in the United States. And had only one target in mind, and that eventually became the tree-lighting ceremony here in Portland.

KING: You mentioned the effective partnership here. Going back five years ago, you decided not to participate in a joint task force operation with the federal government. And we're told now you're rethinking that strategy. What was your reasoning five years ago?

ADAMS: Well, I had concerns that we could not provide effective civilian oversight of our officers that would be embedded in the FBI with the joint terrorism task force. I was also concerned that the administration at the time was -- was being a little lax in terms of, you know, getting court authorization for investigations. This is a city. I'm a mayor. I was a commissioner at the time that feels passionately about preventing terrorist attacks and also passionately about doing that while respecting people's legitimate rights. In this case, the right to due process, the right to have a judge or court authorize investigations that are conducted by the federal government.

KING: And you feel differently about it now based on this operation?

ADAMS: You know, that was -- that was the Portland's decision on the status with JTTF was about four almost five years ago. I think that a significant amount of time, there have been significant changes in Washington, D.C. This event itself, I think prompts for us to look at what's different, what's the same. And, you know, decide whether to rejoin JTTF or to decide whether to continue with the status quo, which is that we work well with the federal law enforcement agencies, but we do it not as an embedded member of the Portland police bureau and JTTF.

KING: It sounds as though you think in this case the federal authority seems to handle this quite well?

ADAMS: Well, based on what I know, the length of time that they took, the thoughtfulness, and they knew that they would be criticized for entrapment, so they described to me making every effort, every opportunity for this individual to beg off. And they spent almost a year and a half, as I understand in allowing this individual to say no, I don't want to go any further. But instead, the accused did just the opposite leading up to the -- as everyone knows -- the fake bomb in pioneer square here in downtown Portland, Oregon, for the tree- lighting ceremony.

KING: The wake of this arrest, you had a fire at the mosque where the suspect had worshipped on occasion. Any doubt in your mind that was arson? And I know you're meeting with the Muslim community out in Portland tonight. What is your challenge going forward?

ADAMS: Well, there's a -- there's an indication that it was arson, strong indication, not definitive yet. I have these ill- conceived acts of retribution -- it is totally against fair principles of this city and I think this nation to take the actions of one potential bad actor and subscribe that or generalize that to an entire group.

KING: And so in your meeting tonight, what will your message to the community be?

ADAMS: Well, it's a combination of things. It's making sure that they feel safe. We've beefed up patrols on facilities or locations that, you know, might be a target for ill-conceived retribution. We want to make sure that they feel a sense of security. We want to talk about the underlying issues. There is no excuse for what the accused could be guilty of. No excuse. But we do need to do everything we can in partnership with all of our communities, in this case the Somali-American community, do everything we can to make sure that the youth are not vulnerable, unnecessarily vulnerable to reconciliation.

KING: Mayor Adams, we appreciate your time tonight.

ADAMS: Thanks, John.

KING: Are there national lessons to be learned from this alleged plot in Portland? And more on the Wikileaks documents released. State Department, more than 250,000 secret cables released, Fran Townsend, Jeff Toobin join us after the break.


KING: Two big national security challenges front and center tonight. The alleged bomb plot we talked about with the mayor of Portland, Oregon, and the Wikileaks release of nearly a quarter million state department secret messages. Let's talk it over with Fran Townsend, a former Bush homeland security adviser and of course our CNN national contributor and Jeffrey Toobin, our CNN senior legal analyst. Jeff I want to start with you based on what you just heard from the mayor there. They have this month-long counterterrorism investigation going on and the alleged plot is to blow up a crowd in Portland, Oregon. And it is kept from the mayor until after the arrest, although the police were brought in late in the investigation. Make sense?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: It's pretty unusual. I mean, I know that Mayor Mike Bloomberg would not be happy if that were the case here in New York. I mean, as you found out in your interview with Mayor Adams, there has been a history of tension with some in the Portland city government and the FBI. But fortunately, this one seems to have ended, ended successfully, but it's a very unusual situation when the top civilian leadership is not brought in an investigation of that magnitude.

KING: Well, Fran, you heard the mayor there essentially saying I didn't trust the Bush administration. That's what he's saying. He didn't say the words Bush, but he was saying the previous administration, I didn't trust the way they were doing thing. He's not quite sure he's going to rejoin this time, but he seems to be more confident now. Do the two administrations do anything differently?

FRAN TOWNSEND, CNN NATIONAL CONTRIBUTOR: No, in fact, we have the same FBI director still in charge applying the same rules in the Obama administration that were applied for domestic counter terrorism investigations during the Bush administration. So, I mean, fortunately you've got the FBI conducting these investigations, they did bring them in, Jeff is quite right. Where Mayor Bloomberg would have been upset and the fact is he would've known sooner because they participate in the joint terrorism task force in New York.

KING: Jeff, is this a glimpse, essentially though at the new face of counterterrorism investigations in the United States? Obviously we think about, you know, al Qaeda overseas, the military operations overseas, intelligence overseas, but when you see the foiled plot allegedly to blow up the metro here at Washington, D.C., it's the FBI involved, investigating one individual, I believe in that case. Here in Portland, Oregon. A Somali-born teenager. Do we assume, I guess, this is going on al across America?

TOOBIN: Very much. These undercover investigations, whether there was Miami, upstate New York, this has gone on in a lot of different places. And the legal issue is the same or close to the same in almost all these cases, which is entrapment. And you know what? That's a very hard defense to make. Juries don't like to acquit people because of entrapment. The keyword in entrapment defense is predisposition. Defendants who claim they are entrapped have to prove that they were not predisposed to commit the crime anyway. That's a very difficult burden for defendants to meet. And even though there have been some high-profile failures in this regard, most defendants who claim entrapment, even in these cases are ultimately convicted.

KING: What's your take away from this? Is this a kid who was radicalized then reached out to Pakistan for some help, allegedly, and was essentially operating on his own and found some people he thought were his friends, going to help him build a bomb. Or is this the new al Qaeda strategy and they are looking to plant people like this all across America?

TOWNSEND: I think very definitely, John. It's part of the new al Qaeda strategy to recruit people over the internet to radicalize them whether it's information on the internet, how to build a bomb or imams, remember the ft. Hood shooter inside our military was in contact with the radical preacher in Yemen. And so all of these are part of a pattern that is part of al Qaeda strategy to radicalize people and get them operational inside the U.S.

KING: I want to shift to the Wikileaks -- go ahead, Jeff.

TOOBIN: I wanted to say regardless of the ultimate source of the crime, the FBI's response has to be the same. I mean, you have to take them all seriously because even if this guy was just a loner and a crazy, you know, poor 19-year-old, that bomb could've killed a lot of people in Portland. So whether it came from al Qaeda or his own crazy head, the FBI had to take it very seriously and did.

KING: Let's move on to the national security damage and the prosecutorial options if there are any in this latest Wikileaks disclosure. About 250,000 secret state department cables, which are transmissions, e-mails, communications back from the embassies around the world, back to the headquarters in Washington. Some of them back and forth. Fran Townsend, I should note officially for the record you were noted in at least one of these from your days of service in the Bush administration. April 29, 2006 you had a meeting with officials in the United Arab Emirates and are mentioned in the communications back. Is there significant national security damage here? Or is there just high embarrassment for the current Obama administration and for those who served in the Bush administration?

TOWNSEND: Well, the damage -- the reason that President Obama and the secretary of state and the attorney general are so upset is we really need our allies to be able to speak to us candidly about their view of national security issues as well as their view of U.S. foreign policy without the risk that they're going to read it in an American newspaper or on a television or see it on television --

KING: Or a German newspaper, or a British newspaper, or around the world.

TOWNSEND: Exactly. It's more the mere embarrassment. We run the risk that our allies will feel unable to speak frankly to us.

KING: Jeff, I want you to listen to the attorney general. He was asked about this today and he talks here about an investigation. But I want to -- let's listen to the attorney general, we'll talk on the other side.

ERIC HOLDER, ATTORNEY GENERAL: I look at the law as it exists and understand that as I said, there are, I think, there's a real basis, there's a predicate for us to believe that crimes have been committed here and we are in the process of investigating those crimes.

KING: Congressman Peter King, a Republican of New York has said maybe this is a violation of the espionage act. Wikileaks is based overseas. Allegedly were given this information from a member of the United States army. Can you prosecute Wikileaks?

TOOBIN: Well, you can certainly prosecute the individuals involved. And remember, there is already one person under arrest. Private first class Bradley Manning is under -- is under arrest for earlier disclosures. Now what remains unclear is whether he is the source of al of these tens of thousands of documents or whether there are other people. But to intentionally disclose classified information is a crime regardless of whether you had access -- legitimate access to it or not. And I would be shocked at this moment if there were not a sealed arrest warrant already in existence for Julian Assange, the head of Wikileaks who is an Australian citizen living mostly in Sweden. But those countries are allies. I think he can run, but he can't hide forever. KING: Let's add to the conversation. The former president, George W. Bush, most of these documents are from the Bush administration, but some are from the Obama administration. He was giving a speech at Facebook headquarters today and he sounded very much like the current Democratic attorney general.

FMR. PRES. GEORGE BUSH: Leaks are very damaging. And people who leak ought to be prosecuted.

KING: You hear the former president there. And, you know, it's always a complaint when information leaks. This happens to be highly sensitive classified information. If you were in the Obama white house, does any white house, Democratic or Republican not have any options knowing this organization has this material? Maybe they've made 50 copies, maybe they have it spread all over the world. Is there no way to just knock on their door and say we are here to take everything you have back?

TOWNSEND: In an information age where you have computers, it's near impossible. When you can move 250,000 documents on a thumb drive literally the size of your thumb, it's almost impossible to get it back. I hear this frustration in President Bush's voice when we were in office. During the 2004 reelection, there were many leaks, some of which we thought were politically motivated. And it is incredibly frustrating.

KING: How is it? Why is it? And this is the issue you want to bang off your Plexiglas is it just this week we hear the state department say we're taking new steps. Just this week you hear the pentagon say we're taking new steps so you can't plug a thumb drive into a computer and copy all this. One would think that, yes, this is a legacy of 9/11. You need to connect the dots, therefore you need to share the information. But if somebody were downloading 250,000 documents, wouldn't there be a bell that goes off somewhere in some, you know, some command center that says somebody's copying 250,000 classified documents?

TOWNSEND: There sure should be.

KING: Why not? You were there in the days after 9/11, why in trying to solve one problem did we create a bigger one?

TOWNSEND: No, and John, you know, there was this instance where a thumb drive introduced a virus into central command's computer system several years ago. So it was -- the opposite, in other words the virus came in and disrupted their system and I thought then that it had been changed that you couldn't introduce thumb drives, you couldn't use them anymore. Why this is still able, also the other way to take documents away is inexcusable, frankly.

KING: Frank Townsend, Jeff Toobin thanks for your help tonight.

When we come back, the latest headlines, including this. Are you a fan or an opponent of the federal bailout programs? T.A.R.P. it was called. The bottom line is changing tonight. It's not as bad as you might think. (COMMERCIAL BREAK)

KING: Welcome back. Let's check in with Joe Johns in Atlanta for more news you need to know right now. Hey, Joe.

JOE JOHNS, CNN CORRESPONDENT: Hey, John. Updating you on this hour's breaking story. A student with a handgun is holding nearly two dozen people hostage in a classroom at Marinette High School in northeast Wisconsin, about 150 miles north of Milwaukee. No injuries are reported. Authorities say a teacher is acting as a student's go between police.

The pentagon's long-awaited report on what troops think of repealing don't ask don't tell will be released tomorrow. Pentagon officials will first brief lawmakers on Capitol Hill, then hold an afternoon news conference.

It looks like the federal government's controversial bailouts of the banking, insurance and auto industries will end up costing taxpayers a lot less than anyone thought, only $25 billion instead of $700 billion. And I've got to tell you, it's a good deal for the taxpayers, but it's still pretty hard to put the word only in front of $25 billion, John.

KING: That's a great way to put it, Joe. But there are a lot of politicians out there who got either beat or bruised for their votes for the bailouts as people in America tend to call who would have liked those numbers out before the election instead of after the election. You're right. It's still 25 b is a big b but $25 billion is a lot smaller than $700 billion. I'm not so great at math but I got that part. Thank you Joe.

You know chances are if you're watching at home you know someone or maybe yourself you've eaten something that made you sick. Every year 75 million Americans suffer the effects of food borne illness. 325,000 people a year get sick enough to have to go to a hospital. We talked in recent months about a partisan log jam in the Senate blocking passage of a food safety bill. It looks now like that bill will pass the Senate. There's a vote tonight, final passage should come tomorrow. What does it mean for the regulators involved in this? Number one, it means the FDA can enforce food recalls, more inspections, especially at places where they think they have a higher risk of things like salmonella. Better tracing of problem foods is one of the safety improvements they say is made from this legislation. What does it mean for a food company? Well, it means for a food company you are going to have to register to the federal government. You're going to have to submit their test results about food safety, certify safety, have a contingency plan in case something goes wrong, new import rules, that's a major calculation here and a tester amendment. John Tester from Montana will exempt some small farms from some of these rules he says they're too burdensome for the little guys in this debate. What does it mean for you the consumer? Well allegedly, we'll see the bottom line, little or no price change. That's been one of the big debates but the final product they say will do that. No surge in recalls is the prediction, but less illness is the goal here. Again, the Senate version likely to pass. They've got to match that up with the house bill. We'll keep you posted because it matters to you.

When we come back, Pete Dominick has something to say about Wikileaks and I'm going to play a little game with Pete.


KING: So as the country's been debating the potential damage of the Wikileaks document release, our offbeat reporter Pete Dominick well I'm told he had a pretty busy afternoon. Pete, what have you been up to?

PETE DOMINICK, OFFBEAT REPORTER: Well that's right John King. I'm not going to end up like the State Department or the Pentagon. I've been destroying old files all day. These are old performances of mine. Take a look at what I did on my back deck this afternoon. Hey, John King, in the wake of this Wikileaks scandal I found myself at my house realizing I have to burn many of my old files. There's all kinds of things that could incriminate me. I know your staff is trying to get something to hold against me, an old CD of my stand-up performances. These are gone. You can't hurt me King. These are old computers, new computers. I'm going to get rid of my iPad. Where's that? I've got to get rid of this thing. I've got video of me on this. That's going to have to go. These Wikileaks people are not going to get me. You'll never get me, King. Here's early Pete on the streets gone. Gone, King!

KING: Can people actually buy DVDs of your stand up performances?

DOMINICK: How dare you, I have a very well selling album. My whole family bought it still available on my web site.

KING: There we go, there we go. Pete Dominick, we'll see you tomorrow. That's all the time we have tonight. Thanks for coming in. Hope to see you tomorrow too. "PARKER SPITZER" starts right now.